Allowance for Credit Losses

9 Months Ended

Sep. 30, 2019

Allowance for Credit Losses [Abstract]

NOTE 7 - ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses consists of the ALLL and the unfunded commitments reserve. Activity in the allowance for credit losses by LHFI segment is presented in the following tables:



	Three Months Ended September 30, 2019									Nine Months Ended September 30, 2019
(Dollars in millions)	Commercial			Consumer			Total			Commercial			Consumer			Total
ALLL, beginning of period		$1,202			$479			$1,681			$1,080			$535			$1,615
Provision for loan losses	42			88			130			208			201			409
Loan charge-offs	(35		)	(104		)	(139		)	(88		)	(289		)	(377		)
Loan recoveries	5			22			27			14			69			83
Other¹	—			—			—			—			(31		)	(31		)
ALLL, end of period	1,214			485			1,699			1,214			485			1,699

Unfunded commitments reserve, beginning of period ²	70			—			70			69			—			69
Provision for unfunded commitments	2			—			2			3			—			3
Unfunded commitments reserve, end of period ²	72			—			72			72			—			72

Allowance for credit losses, end of period		$1,286			$485			$1,771			$1,286			$485			$1,771

¹ Represents the allowance for restructured loans that were transferred from LHFI to LHFS in the first quarter of 2019 and subsequently sold in the second quarter of 2019.

²The unfunded commitments reserve is recorded in Other liabilities in the Consolidated Balance Sheets.



	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
(Dollars in millions)	Commercial			Consumer			Total			Commercial			Consumer			Total
ALLL, beginning of period		$1,068			$582			$1,650			$1,101			$634			$1,735
Provision for loan losses	36			25			61			37			91			128
Loan charge-offs	(51		)	(71		)	(122		)	(95		)	(234		)	(329		)
Loan recoveries	9			25			34			19			70			89
ALLL, end of period	1,062			561			1,623			1,062			561			1,623

Unfunded commitments reserve, beginning of period ¹	72			—			72			79			—			79
(Benefit)/provision for unfunded commitments	—			—			—			(7		)	—			(7		)
Unfunded commitments reserve, end of period ¹	72			—			72			72			—			72

Allowance for credit losses, end of period		$1,134			$561			$1,695			$1,134			$561			$1,695

¹ The unfunded commitments reserve is recorded in Other liabilities in the Consolidated Balance Sheets.

As discussed in Note 1, “Significant Accounting Policies,” to the Company's 2018 Annual Report on Form 10-K, the ALLL is composed of both specific allowances for certain nonaccrual loans and TDRs, and general allowances for groups of LHFI with similar risk characteristics. No allowance is required for LHFI

measured at fair value. Additionally, the Company records an immaterial allowance for LHFI products that are insured by federal agencies or guaranteed by GSEs, as there is nominal risk of principal loss.

The Company’s LHFI portfolio and related ALLL are presented in the following tables:



	September 30, 2019
	Commercial Loans				Consumer Loans				Total
(Dollars in millions)	Carrying Value		Related ALLL		Carrying Value		Related ALLL		Carrying Value		Related ALLL
LHFI evaluated for impairment:
Individually evaluated		$339		$71		$1,841		$108		$2,180		$179
Collectively evaluated	84,668		1,143		71,483		377		156,151		1,520
Total evaluated	85,007		1,214		73,324		485		158,331		1,699
LHFI measured at fair value	—		—		124		—		124		—
Total LHFI		$85,007		$1,214		$73,448		$485		$158,455		$1,699



	December 31, 2018
	Commercial Loans				Consumer Loans				Total
(Dollars in millions)	Carrying Value		Related ALLL		Carrying Value		Related ALLL		Carrying Value		Related ALLL
LHFI evaluated for impairment:
Individually evaluated		$149		$13		$2,462		$154		$2,611		$167
Collectively evaluated	80,791		1,067		68,274		381		149,065		1,448
Total evaluated	80,940		1,080		70,736		535		151,676		1,615
LHFI measured at fair value	—		—		163		—		163		—
Total LHFI		$80,940		$1,080		$70,899		$535		$151,839		$1,615